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$A at 2014 high - but RBA chief avoids jawboning

Glenda Kwek

On the up: Economists are tipping the dollar to continue its rise. Photo: Bloomberg

The Australian dollar has surged to a three-month high after a string of strong economic figures drove up confidence about the economic outlook.

The currency was boosted by new figures released over the past few days, which showed a healthy improved in retail trade and a large rise in the trade surplus.

The dollar rose as high as US91.13¢ early on Friday, its highest level since mid-December. It was buying US90.90¢ in late trade.

The Australian dollar ... surging to a three-month high. Photo: Bloomberg

The jump in the currency came as RBA governor Glenn Stevens passed on the opportunity to talk down the Australian dollar, amid signs the central bank could be comfortable with its current levels.

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The head of the Reserve Bank was cautiously optimistic about his outlook for the Australian economy in his testimony to the House of Representatives economics committee, saying while there was scope to lower interest rates if it was needed, ''I do not think we do need to at this point in time''.

While the committee members gave Mr Stevens several opportunities to call for a lower exchange rate, which he had done on numerous occasions late last year, the RBA chief sidestepped the questions.

''I have been prepared to say that at various times I thought its long-run equilibrium was probably somewhat lower than where it was trading at the time,'' Mr Stevens said in response to a question on ''what is jawboning''.

He also declined to comment on whether an Australian dollar trading below US90¢ was in line with the economy's fundamentals, saying only that he stood by his previous remarks.

In his opening comments, he said that the currency was ''still high by historical standards'', repeating the phrase the RBA used in its March board meeting statement earlier this week.

However, Mr Stevens had described the currency as being ''still uncomfortably high'' in early December when it was trading about US91¢ — the same levels it was trading at on Friday.

Mr Stevens' quip that he had ''nothing new to say'' on the currency's levels on Friday ''suggests that the RBA may be more accepting of the currency at its current level that we first thought'', Barclays' chief economist Kieran Davies said.

Analysts said it could also be an acknowledgement that the ''jawboning'' approach could have less of an impact on financial markets amid a shift towards a neutral monetary policy stance, or that the central bank was concerned of the impact a weaker exchange rate could have on pushing up inflation levels.